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Steps To Take Now To Improve Your Financial Situation In The Future

Money is a subject that is never too far from our thoughts. When you run a household and you’re raising kids, it can be difficult to balance the books and save. Most parents dream of building a stable financial future for their family but often, this is easier said than done. In this guide, we’ll discuss some steps to take now to improve your financial situation in years to come. 

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Budgeting

The best place to start when embarking upon a mission to save more and stabilise your finances is drawing up a monthly budget. If you don’t already swear by a budget, you may be surprised at the impact it will have. To create your budget, you can use an app, a spreadsheet or a good, old-fashioned notepad. Note down your income, your regular expenses, for example, your mortgage and utility bills, and then add a column with one-off costs you will need to cover in the month ahead. Use your budget to calculate how much disposable income you have and to analyse spending. Go through your statements, look at your list of standing orders and direct debits and check all of your balances. 

Once you have all the figures in front of you, use your budget to set spending limits, set up a transfer to your savings account if you are able to put money aside and outline areas where you want to try and reduce spending. We tap to pay, purchase products at the touch of a button on our phones and make payments by direct debit all the time these days, which means that it can be tricky to keep track of spending. There may be payments that you’d forgotten about or you might be shocked at how much you’re spending on clothes, groceries or eating out and takeaways, for example. Cut out costs such as subscriptions and memberships you don’t use and set a budget that will encourage you to lower spending. If you’re paying over £100 every time you go to the supermarket, for example, write a list of items you need, stick to it and try and get down to £80 or £70 instead. 

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Saving and setting up an SOS fund

Saving money gives you the flexibility and capacity to spend or shield yourself against unexpected costs in the future. There is an argument for living in the moment and seizing the day but it’s also important to recognise that nobody knows what is around the corner. Try to save regularly and build up a pot that you can dip into if you have to cover bills that come out of the blue or your earnings drop. You can also set up accounts for specific targets or goals, such as a wedding fund, a round-the-world trip or a new car. The best way to save is to use your budget to establish how much you could realistically put aside each month and then set up a transfer directly to your savings account. You can top up your balance if you have a bit more cash left over at the end of the month or you get a windfall. Many people like to make their payment on payday so that they know that they have contributed to their savings fund before they start spending on non-essentials and luxury items. 

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Investing

Interest rates are very low at the moment, which means that putting money into a savings account won’t enable you to grow your money. If you’re looking to maximise your income or set up a fund for the future, it’s wise to explore investment options. 

Often, when you hear the word ‘investment,’ it’s common to conjure up images of boards filled with numbers to represent market movements and flipping houses. Investing in stocks and shares and property are among the most popular options but they are not the only means of increasing your balance. It’s also possible to back business ventures, to start trading as a side hustle, to purchase commercial properties and land and to explore opportunities such as buying cryptocurrency. 

Buying property is a popular investment option because bricks and mortar are always in demand and the yield can be impressive. If you’re looking to purchase a house or a holiday home, there are two main options. You can buy to sell or buy to let. If you want to sell, you can take on a project, do a house up and then put it on the market or you can keep hold of it, rent it out and then sell in the future. If you buy to let, you can generate a steady income while paying into an asset that is likely to appreciate in the future. As well as looking at conventional real estate investments, you could also expand your search to cover business premises or find cheap woodland for sale to invest in. Always look for assets that are in demand, conduct extensive research in advance and take a close look at the facts and figures before making your move. It’s beneficial to buy when prices are low and to sell when demand is increasing and prices are rising. 

If you like the idea of buying stocks and shares or trying your hand at trading while you’re still working, it pays to research and to read up on how the markets work and what kinds of movements and signs to look for when purchasing and selling. You can hire experienced traders, make use of demo programmes to learn the ropes and gather information from reputable financial news sources. For those considering buying cryptocurrency, it’s useful to keep a close eye on the news and to monitor trends. There is a higher risk involved in acquiring shares and cryptocurrency than buying property but if you make the right calls at the right time, these types of investments can be incredibly lucrative. 

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Most parents would like to have plenty of money in their savings account and a bright financial future. It’s not always easy to stay in the black and grow your money but taking steps now can make a difference in the years ahead. 

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